Carried out by HSBC the "first-ever" transaction on financing of trade using a blockchain

On May 14, 2018 HSBC announced carrying out as it approves financial conglomerate, the first-ever transaction on financing of trade using a blockchain. The new technology should increase efficiency of the international trade operations which volume is measured by trillions of dollars, transfers Reuters news agency.

HSBC and ING Bank issued the letter of credit through the R3 Corda blockchain platform for Cargill company to transport a load (soybeans) from Argentina to Malaysia through the subsidiary companies belonging to the trader from Geneva and Singapore.

Carried out by HSBC the first-ever transaction on financing of trade using a blockchain

As specified in HSBC, earlier the blockchain was already applied to commission of documentary operations together with other technologies, but the transaction of Cargill is unique from that position that for the first time was the uniform digital application instead of several systems is used.

It is a turning point for trade mechanisms. For a reinforcement of transactions buyers and suppliers use the letter of credit now, imprisoning him on paper documents which it is necessary to deliver physically — the development director of innovations and growth of corporate business of HSBC Vivek Ramachandran says. — Thanks to a blockchain the need for a paper reinforcement disappears, all participants of the transaction are connected on the platform and updates are instant. It means to business that trade financial transactions became simpler, quicker, is more transparent and it is more reliable.

It is expected that use of a blockchain in the bank environment will reduce a fraud risk at application of letters of credit and other transactions and also will reduce quantity of stages the transaction.

HSBC provides data of the UN according to which transfer of all document flow connected with trade in the Pacific Rim to an electronic form, will help to reduce time spent for export of goods by 44% and to reduce costs for value to 31%.^[1]

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